Maryland Regulatory Update

Maryland Regulatory Update

The Maryland Commissioner of Financial Regulation (“Commissioner”) recently adopted amendments to their regulations in order to reduce the amount of certain fees, effective July 1, 2016.  In addition, on May 10, 2016, the Commissioner issued a Mortgage Lender Licensing Advisory to address certain changes regarding licensing.

 

MARYLAND REGULATIONS 09.03.06, 09.03.09 AND 09.03.12

 

The mortgage lender license and mortgage loan originator license application investigation fees have both been reduced from $100 to $1.

 

The fee for prefile mediation in the case of a foreclosure has been reduced from $350 to $1.

 

MARYLAND MORTGAGE LENDER LICENSING ADVISORY

 

Trade Names

All trade names must be registered with the Maryland Department of Assessments and Taxation before they can be used in Maryland and previously, mortgage companies were required to have a license for each trade name used.  The following changes to this policy are effective June 1, 2016:

  • Licensees are no longer required to obtain additional licenses to register other trade names (“Other Trade Name License”).  One license in the formal name of the entity is all that is required and only one trade name will continue to appear on the printed license;
  • All trade names, however, must continue to be designated on Nationwide Multistate Licensing System and Registry (“NMLS”);
  • All current holders of Other Trade Names Licenses should surrender the license as it will not be renewed; and
  • Entities that only hold an Other Trade Name License must submit an application at renewal for a regular mortgage lender license in the formal name of the entity.

 

Qualifying Individual

Qualifying Individuals (“QI”) must meet certain criteria as outlined in the Commissioner’s Qualifying Individual Advisory in order to ensure the designated individual possesses the requisite experience in the mortgage lending business.  Over the next few weeks, the Commissioner’s staff will review the company’s file to confirm the QI meets the criteria.  If the Commissioner finds that the designated QI does not meet the requirements, a deficiency will be placed on NMLS.  In addition, the license status will be changed to “Approved-Deficient.”  The company will be able to continue to do business for the remainder of this license year, but it will be unable to submit a renewal application until the issue is addressed.

 

Financial Statements

Financial statements must be prepared by a Certified Public Accountant (“CPA”) based on a compilation, audit, or review.  Documentation must clearly identify the CPA that worked on the financial statements.  The Commissioner will review 2015 fiscal year-end financial statements to ensure satisfaction of the minimum net worth requirement.  These statements were due to be filed with the Commissioner on or before March 31, 2016.  Failure to submit proper financial statements will result in a change of the license status to “Approved-Deficient.”  The company may conduct business for the remainder of this license year, but it will be unable to submit a renewal application until the issue is resolved.  The Commissioner hopes to complete a review of submitted statements by July 1, 2016.

 

 

Updated Bond Form

Previously, bond continuation or verification certificates could be used to renew a license. Bond continuation certificates will no longer be accepted for license renewal, and a new bond form must be submitted every year.  The Commissioner has provided a new bond form for use by all licensees and applicants.  The Mortgage Lender License Bond Form can be found on the NMLS and covers the 2017 licensing period.

 

The Commissioner will review the Mortgage Call Reports submitted for the period ending December 31, 2015, and that were due by Mach 31, 2016, to determine proper surety bond coverage is in effect.  Failure to submit the Mortgage Call Reports will result in a change of the license status to “Approved-Deficient.”  The company may conduct business for the remainder of this license year, but it will be unable to submit a renewal application until the issue is resolved.  All new bond forms must be submitted by November 1, 2016, reflecting coverage for the next licensing period.  Failure to provide a new bond form will prevent a company from submitting a renewal application.

 

Good Standing Status

Mortgage lender licensees and applicants must be in good standing with the Maryland State Department of Assessments and Taxation to conduct business in Maryland; however, it is no longer necessary for an applicant to provide a Good Standing Certificate.  The Commissioner’s staff will confirm the good standing status of licensees by October 1, 2016.  If the licensee is not in good standing, the license status will be changed to “Approved-Deficient.”  The company may conduct business for the remainder of this license year, but it will be unable to submit a renewal application until the issue is resolved.

 

Continuing Legal Education and Contact Information

Continuing education can be completed any time during the year, and it is necessary for license renewal.  Licensees are reminded to update contact information on NMLS.